A government-issued bond has a nominal value of £100 and an annual coupon of £8. The bond has 20 years until maturity. Its current yield is 4%.
The current market price of the bond is
£100
£108
£160
£200
176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.